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Trends With: Linnea Jacobsen

by BSCC 08/04/2024 6074 Views

EY is one of the largest professional services networks in the world. It primarily provides assurance, tax, information technology services (including managed services in areas like Cybersecurity, Cloud, Digital Transformation and AI), consulting, and advisory services to its clients. The company’s purpose is to build a better working world. The insights and services they provide help to create long-term value for clients, people and society, and to build trust in the capital markets.

Linnea Jacobsen is a tax lawyer and leader of EY’s indirect tax team in Sweden. She is serving as an advisor for companies in various sectors, with her main focus on value-added tax (VAT), excise taxes, customs, and sustainability from a tax perspective.

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What trends do you see within your line of business?

The global taxation landscape is increasingly focusing on sustainability, primarily via indirect taxes. Notable developments are the EU’s and UK’s adoption of Carbon Border Adjustment Mechanisms (CBAM) and new regulations like the EU Deforestation Regulation (EUDR). These regulations aim to incentivise sustainable practices and level the playing field for businesses subject to different environmental laws.

From your perspective, what are the greatest challenges right now?

The blend of indirect tax and sustainability presents multiple challenges for companies. Complying with comprehensive regulatory frameworks and aligning them with economic growth, with respect and care for the environment, is a significant task. Businesses often struggle with data collection and reporting in alignment with these regulations. The diversity of legislation and tax systems, as well as the practical implementation of new measures like CBAM and EUDR, complicate matters further. An additional challenge relates to the legal implications, including potential fines and personal criminal responsibilities for representatives, i.e., board members and CEOs, if EUDR rules are not met.

As a tax consultant, I see companies struggling with their responsibility to educate themselves about these changes and new rules, how to adhere to them, and their broader impact.

And, opportunities?

Even with the challenges, the intersection of indirect tax and sustainability brings about potential opportunities. If given proper attention, businesses can potentially reduce costs under certain green taxes and CBAM by reassessing operation and supply chain models, as well as investing in greener products. Also, using proper technical compliance tools can help in making informed strategic decisions. Adopting such practices can enhance a company’s reputation, attract more customers and investors, and help to foresee and leverage future regulatory shifts.